When it comes to winning students’ business, Irish banks need to study harder. While UK banks seem to offer a dizzying array of incentives, offers from the reducing field of players here lack the same pizzazz.
Across the water, students are lured with everything from cash back to Asos discounts, railcards, free online library subscriptions to tempting Uber Eats and restaurant discounts. It’s nice to feel wanted.
HSBC, for example, offers UK students an interest-free £3,000 overdraft along with £80 cash back and the choice of either an Uber Eats voucher worth £20 or a year of unlimited next-day delivery with Asos Premier. Of course unlimited next-day Asos delivery could get you into some financial hot water. It's only worth a tenner and you should really be focusing on the terms and conditions of the overdraft, but at least HSBC is trying to get down with the kids.
Here, free fees (but only in some cases) and online banking are about as much as the banks can muster. Whoopeedoo. All the more reason then for students here to swot up before choosing a bank.
Current accounts
Most students need a current account. It's a place to receive money from parents, a student grant if you get one and any student earnings from a part-time job. And it'll be useful to pay utilities. One of the many great things about being a student is mostly free banking: you don't, like most fully formed adults, have to fork out up to €75 a year in bank charges.
All the student current accounts on offer here have pretty similar features.
Students opting for a KBC current account go one better. They will have €50 transferred to their new current account. KBC, which has signalled that it is winding down its Irish operation, might suit the more tech savvy too with account holders able to use Garmin pay and Fitbit pay too.
However, if you run out of cash in your current account – it happens – KBC charges 8 per cent surcharge interest on the unauthorised overdraft. That won’t happen with Bank of Ireland’s third-level student account... simply because it doesn’t have an overdraft facility.
Be mindful, too, of fees on overseas transactions. Students travelling or studying outside of the euro zone will pay a fee for every non-euro cash withdrawal – ranging from a minimum of €2 with AIB to €3.17 with Bank of Ireland and KBC. If you use your debit card to pay for something in a foreign currency, you'll pay about 45 cent on each transaction.
Apps
Many students now use a traditional current account in conjunction with a digital-only bank account such as N26 or Revolut. You won't be able to go into a branch to lodge your Confirmation money or cash that cheque from granny but, for everything else, the experience is pretty good and mostly fee-free.
These apps are pretty helpful for student life. Revolut has a feature that lets you split a bill with any contact on your phone
It’s free to open an account with both, but if you want a physical debit card, N26 charges €10 or it is €6 with Revolut. You can link your traditional current account to your Revolut account for example, topping up your Revolut balance using the app at no fee. With N26, there’s a steep 3 per cent fee after your first top-up. Contactless and chip and pin transactions with both banks are free.
These apps are pretty helpful for student life. Revolut has a feature that lets you split a bill with any contact on your phone. You just tap the payment you want to split and select who you want to split it with. A fellow diner, for example, will receive a request for the amount owed which they can then tap to approve.
You can do some sneaky saving with Revolut too – its “vault” feature automatically rounds up transactions to the nearest euro, siphoning the difference to your “vault”, which is handy for saving towards those pricey festival tickets.
You probably won't be doing too many ATM cash withdrawals using these apps, but if are, know that there are fees.
With N26, you get three free ATM withdrawals a month: after that, there’s a €2 charge each time you take money out of the ATM. With Revolut, you can withdraw €200 a month or make five withdrawals. After that you are charged €1 or 2 per cent per withdrawal, whichever is higher.
Transferring money to other Revolut users or to other bank accounts in Ireland in euro is free. If you want to send money to an account in the US or Australia, an international transfer fee will apply ranging up to €5.
If you travel abroad, in comparison with traditional banks, N26 and Revolut are both attractive with none or minimal fees on purchases made on your debit card outside of the euro zone.
Student loans
Who hasn’t needed a dig out as a student? The lucky will rely on parents. Those fending for themselves may end up borrowing. If you have a one-off big expense, such as your student contribution charge, travel or replacing a laptop, a short-term student loan can help.
A student borrowing €1,000 with Bank of Ireland’s standard student loan on a variable rate of 5 per cent over one year will have monthly repayments of €85.57. In addition to repaying the sum borrowed, you will pay €26.84 for borrowing. Do the same with AIB’s student contribution charge loan, which has an 8.5 per cent variable rate, and the monthly repayments are €87.07 and the total cost of credit is €44.84.
In both cases, you must have a student current account with the bank. With Bank of Ireland, students can repay weekly or monthly, and over a term of up to five years. AIB offers flexible repayment options such as interest only for a fixed period. With both banks there is no penalty for early repayment.
If you are borrowing from the credit union, each branch sets its own interest rate. An education loan of €1,000 from MPCC Credit Union in Dooradoyle, Limerick, you will have monthly repayments of about €87 a month, or €20 a week, and you will pay about €44 for the cost of the loan.
If you need to borrow a bigger amount, for example €5,000 over five years, your monthly repayments will be €94.10 with Bank of Ireland and €101.83 with AIB. Over the five-year period, that credit will cost you €463.51 more with AIB.
Credit cards
Speaking of credit, a credit card is appealing of course, and can be especially handy for overseas travel, but students should tread carefully. A credit card means you are borrowing money and agreeing to pay it back at the end of the month. If you don’t, you’ll get charged interest and fees. That’s how the bank makes its money.
If you don’t have an income, you may struggle with repayments and the amount you owe will grow. The minimum repayments may look very doable, but by only paying these, you’re not clearing the debt. It will have to be repaid at some stage.
Dedicated student credit cards are available from KBC, Bank of Ireland and AIB, all of which require you to have a current account with them. The credit limit varies by bank. With KBC, first-year students have a credit limit of €300, rising to €800 from second year. With Bank of Ireland, the credit limit for students is €500 and with AIB its €750.
If you plan to use the card in a non-euro area to withdraw cash or pay for items, beware of fees
The annual percentage rate (APR) charged on purchases ranges from 18.25 per cent with KBC to 20.5 per cent with AIB. And remember also that while interest on purchases only kicks in if you do not pay off the balance in full each month but, if you use the card to borrow cash (never a good idea), interest will kick in from that date.
Students with an AIB credit card get an introductory interest rate on new purchases of 3.83 per cent for the first 12 months. With Bank of Ireland, its 0 per cent for the first six months. There is no introductory rate with KBC.
If you fail to make a repayment or make a late repayment, the penalties can add up, running at €7 a pop at both AIB and KBC.
If you plan to use the card in a non-euro area to withdraw cash or pay for items, beware of fees. Depending on the bank, you could be hit with a flurry of currency conversion fees and cross-border handling charges, whatever they are. Students with a Bank of Ireland credit card are entitled to worldwide multi-trip travel insurance when they hold the card before travelling.
Think carefully before allowing spending to rack up. For example, if you max out your credit card, spending €750 on a very enjoyable package holiday to Greece, and making repayments of just €20 a month at an interest rate of 20.5 per cent, it will take five years and a one month to clear the debt – and you’ll have paid €1,220 over that period. That’s one holiday you won’t forget.
